He completed the first part of the journey Down Under, to Bangkok, but having suffered from neck and back problems on the plane he has decided to return to the UK for medical treatment rather than taking the flight to Melbourne.
O'Sullivan was due to play Dominic Dale in the last 32 of the event in Bendigo. Instead, Dale will now face Australia's Steve Mifsud. Wild card Mifsud was originally due to face Matthew Selt, so Selt goes straight into the last 32 to play John Higgins.
Steve Mifsud said: "It's a bit of a shock for me but I'm really looking forward to getting out there in front of the home support. I know that throughout Neil's career he has received a lot of support in Australia and I've built up a bit of a following as well.
"It will be nice to play that first match and hopefully I will produce some good snooker. Dominic is a tough player and two weeks ago I was playing in the VBSA (Victoria Billiards and Snooker Association) League so it's a big step up for me and I just have to focus on that match."
Neil Robertson added: "With three Australians in the same quarter of the draw there's a decent chance of one of us playing in the semi-finals."
The tournament starts on Monday and runs until Sunday July 24.
